Lawmakers Mulling Rural Development Proposals

Although there has been movement this legislative session to merge various state agencies, lawmakers appear to be outdoing themselves to create new agencies dealing with rural economic development.

One agency already has been created, and its supporters are seeking state start-up funding next fiscal year, which starts July 1. Two other agencies are proposed in bills before the General Assembly, though one of the bills likely is dead for now.

The author of a bill that would create one of the new agencies acknowledged to The Nerve that no coordination exists among the legislators pushing their proposals.

“I’ll be the first to admit we’ve got too many entities out there working in separate silos,” said Rep. Dwight Loftis, R-Greenville, when contacted last week.

Loftis in February introduced a bill (H. 3633), titled the “South Carolina Agribusiness Economic Development Authority Act of 2011,” which would create a separate agency within the S.C. Department of Agriculture to help finance new agricultural-related businesses in the state.

The agency could receive state general funds and any other “financial assistance, guarantees, insurance or subsidies from the federal or state government,” under the bill.

A Department of Agriculture official told The Nerve in February that the proposed authority would be similar to the S.C. Jobs-Economic Development Authority, a state agency that assists economic development projects by issuing special-obligation revenue bonds.

Loftis said the agency proposed under his bill would help develop a “viable opportunity in niche markets in agriculture,” adding that “North Carolina has done a much better job than South Carolina.”

Although Loftis’ bill has 29 co-sponsors, it hasn’t moved out of the House Committee on Agriculture, Natural Resources and Environmental Affairs. But another bill (S. 211) that would create the “I-95 Corridor Authority,” aimed at bringing new businesses to poor counties along Interstate 95, is much farther along.

That bill, sponsored by Sen. John Matthews, D-Orangeburg, overwhelmingly passed the House during last week’s second reading. After a routine third reading on Tuesday, it was returned to the Senate, which will decide whether to concur with the House version.

If the Senate agrees, the bill would go to Gov. Nikki Haley for her consideration; if not, the differences would have to be worked out in a conference committee.

A similar bill by Matthews passed the Senate last year but died in the House Ways and Means Committee.

Like the agency proposed by Loftis, the I-95 Corridor Authority could receive state funding, buy and sell land, and enter into contracts with private entities. The authority also could hire another state-created and state-controlled agency, known as the S.C. Research Authority, to “execute the recommendations” of a 2009 study dealing with economic development along the corridor.

Both the I-95 Corridor Authority and Loftis’ proposed agency would be controlled by boards whose members would be appointed in large part by lawmakers, though the governor would have appointment power under Loftis’ bill, and the corridor authority board would include representatives from colleges and universities in the corridor.

Matthews told The Nerve he spoke last week with several aides in Haley’s office about his bill. He said although he didn’t specifically ask the aides about whether the governor would veto the bill, they “seemed to be okay” with it.

But even if the authority were created, there are no state funds for it in next fiscal year’s budget.

“That’s not the intent at this point; the intent is to find some private resources to pull it together,” Matthews said, noting a couple of foundations have expressed interest in providing start-up funding. “It’s going to be a long process, but I think we can put some things in place to reverse those trends on the I-95 corridor.”

The interstate cuts through or is located near counties with some of the state’s highest unemployment rates. Marion County, for example, led South Carolina in April with an 18.7 percent unemployment rate, according to figures released last week by the S.C. Department of Employment and Workforce.

Meanwhile, a proposed state budget proviso (81.3) for next fiscal year would funnel the entire $13 million in the state’s Rural Infrastructure Bank Trust Fund to another rural economic development agency created last year, named the “S.C. Rural Infrastructure Authority.”

That authority was created under a bill sponsored by Rep. Bill Clyburn, D-Aiken, who is co-sponsoring Loftis’ pending bill. The law creating the authority took effect over then-Gov. Mark Sanford’s veto, but the Legislature didn’t fund the agency in this fiscal year’s budget.

Under the law, a seven-member board appointed mainly by legislative leaders and the governor can make grants and loans to local municipalities that apply for rural infrastructure projects, which include such things as the purchase of land and buildings for economic development.

Contacted last week, Clyburn told The Nerve that a governing board, director and staff wouldn’t be selected until the agency secures initial funding, adding that so far, the proposed $13 million would be its only funding source.

Last year, the S.C. Budget and Control Board grabbed the $13 million to keep its own agency afloat after Sanford vetoed its entire $25.2 million general fund budget, but the S.C. Supreme Court later ruled that the veto was unconstitutional.

Clyburn said he doesn’t believe that the Rural Infrastructure Authority would duplicate functions of the proposed I-95 Corridor Authority. He said the infrastructure authority would finance “smaller projects,” while the corridor authority would “deal with bigger things.”

“I think they (Rural Infrastructure Authority) will start with smaller items, like a sidewalk in an area or some water lines that won’t cost that much,” Clyburn said.

Asked the same question about possible duplication of services, Matthews replied, “Absolutely not,” though he also said, “We will work with any group.”

Although Loftis voted for Matthews’ bill last week, Loftis told The Nerve before the vote that he believes any new agency dealing with rural economic development should have oversight by the S.C. Department of Agriculture. He also said new agencies should be required to submit regular written reports to the Legislature and governor to improve accountability.

The agency proposed by Loftis would not be controlled by the agriculture department, though it would be part of the department. Under his bill, the state agriculture commissioner, who is popularly elected, or his designee, would be a voting member of the agency’s governing board.

“I think the Department of Agriculture needs to take the reins of commercial agriculture in this state,” Loftis said.